A former KeyBank loan officer who lived in Cumberland and owned a boating supplies store in Falmouth Foreside used other people’s identities over the course of 17 years to obtain $14 million in loans and lines of credit, which he spent on vacations, his children’s education and a house for his mistress, according to court documents.

Walter Scott Fox, 56, who worked at the bank’s Maine headquarters at Canal Plaza in Portland, admitted Tuesday to bank fraud and tax evasion. He pleaded guilty in U.S. District Court in Portland and was released on a $5,000 bond, said his attorney, Thomas Hallett.

Additional Photos

Walter Scott Fox spent some of the money obtained in a bank fraud scheme on his boating supplies business called The Boathouse, once located in this building at 215 Foreside Road in Falmouth, court documents say. Gordon Chibroski/Staff Photographer

This home at 6 Friar Lane in Cumberland was one of three addresses for Walter Scott Fox, who pleaded guilty to fraud Tuesday, February 4, 2013. Gordon Chibroski/Staff Photographer

Hallett said Fox surrendered himself and is taking responsibility for his actions.

Fox, who goes by Scott and now lives in Canton, Ga., faces up to 30 years in prison for bank fraud and up to five years for tax evasion, as well as fines totaling as much as $19.1 million. Hallett said Fox is scheduled to be sentenced in May.

From 1995 until 2012, Fox originated KeyBank loans and credit lines using the identities of four people without their knowledge. One of the people named on loan papers died in 2007, and Fox wrote a memo saying the person’s son had taken over the loan, the court documents say.

Of the $14 million in loans and credit that Fox received, he used $5.8 million to keep the scheme going and spent the other $8.2 million on his family, his mistress and his business, The Boathouse.

Because Fox didn’t report that income to the Internal Revenue Service, he was charged with evading $1.3 million in taxes. That’s the amount he would have owed on the money he obtained fraudulently from 2006 to 2011, years that are not beyond the statute of limitations for tax offenses, said Assistant U.S. Attorney Halsey Frank.

Fox’s scheme fell apart in 2012, when KeyBank denied an increase in one of his lines of credit — money he was counting on to keep the complex scheme going, says the U.S. Attorney’s Office in Portland.

By that August, he was delinquent on all of the fraudulent loans, sparking the concern of a supervisor who started asking questions about his loan portfolio, which prompted Fox to resign the next month.

“We are sorry to say that a former employee of ours has pleaded guilty to federal bank fraud and tax evasion charges,” said Therese Myers, a spokeswoman for KeyBank. She said no clients’ funds were lost.

Myers said KeyBank cooperated with the investigation, which was conducted by the FBI and the Internal Revenue Service.

The Boathouse, on Foreside Road in Falmouth, closed last spring, according to its Facebook page.

Bill Richards, manager of the Portland Yacht Club, said Fox resigned as a member recently. He said Fox told him he was retiring and moving south.

Richards said the charges were “all news to me.”

Fox, who was involved with the junior sailing program at the yacht club, was the race manager for the USA Junior Olympics Sailing Festival when it was held in Portland in 2010, according to its website.

Fox is still listed in Cumberland’s assessing records as the owner of a nearly $400,000 home on Friar Lane, but Town Manager Bill Shane said it was sold within the past couple of months.

According to court documents, Fox bought a home on Critter Road in Windham in 2011, along with a Subaru Forester, for “a woman with whom he’d been having an affair for several years.”

He quickly turned over the deed to the woman, court documents said, and also paid the mortgage and property taxes for a home she owns near Bangor, her income taxes for 2010, a $5,000 retainer for a law firm for her, and her cellphone bill.

Leslie Bridgers can be contacted at 791-6364 or at: [email protected]Twitter: lesliebridgers

To our readers: We have made a change to comments on this site. Please sign in or register on our new Disqus platform to participate. Questions? Email us.

Here at MaineToday Media we value our readers and are committed to growing our community by encouraging you to add to the discussion.

To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use. Click here to flag and report a comment that violates our terms of use.